Issuer officials who said Treasury's final issue price rules are a vast improvement over earlier proposals nevertheless raised concern that they might discourage competitive sales of bonds or create problems for issuers if underwriters run afoul of the rules.

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Nassau County, N.Y., will ask voters on Monday to consider a $400 million bond issue to rebuild aging Veterans Memorial Coliseum in Uniondale and to construct an adjacent minor league ballpark.

Proponents say replacing the outdated coliseum is necessary to keep the National Hockey League’s New York Islanders from leaving Long Island, where they have played since 1972. Team owner Charles Wang has said a new arena would enable the team to stay in suburban New York at least until 2045.

Opponents say the financially strapped county — which has been operating under a state oversight board — can ill afford another tax increase, that public money would be spent for essentially a private real estate deal, and that economic and attendance projections from the county and Wang are overly optimistic.

Each side predicts victory in the referendum, which has polarized Long Island. Should it pass, the proposal would still need approval from the Nassau Interim Finance Authority, a state-appointed board that oversees the county’s finances, as well as Nassau’s Legislature and comptroller’s office.

Both sides in the dispute each held rallies in the county last week.

“We’re optimistic that the voters will consider this a viable option and we’ll get a new arena that people will enjoy for decades to come,” said deputy finance executive Tim Sullivan. “The status quo is not acceptable. If we don’t approve this, we stand a good chance of losing our sports franchise.”

“I think the voters will turn it down,” said Mark Hamer, a board member for the Association for a Better Long Island, a business group that opposes the measure. “We think it’s fiscally irresponsible. It’s so crazy on so many levels. We don’t believe this day and year, with Nassau County broke, that we should be floating a $400 million bond offering.”

“We don’t want the Islanders to leave, but Nassau County taxpayers should not be the guarantors of a bond issue that is essentially a private real estate deal,” he added.

Other business groups, including the Long Island Association and the Long Island Convention and Visitor’s Bureau, are behind the plan.

County officials justified the stand-alone midsummer referendum date, saying voters need to judge the bond issue on its merits and not confuse it with other ballot items in November. The bond election’s estimated cost is about $2 million.

Opponents accuse the county of stacking the deck. “It’s rigged to get a yes vote. They want as small a turnout as possible,” Hamer said.

Observers also call the referendum a political test for County Executive Edward Mangano, a Republican who upset Democrat Thomas Suozzi in 2009.

Nassau County’s financial struggles serve as a backdrop. The county, on suburban Long Island east of New York City, has an estimated budget gap of $120 million for fiscal 2011.

The Nassau Iinterim Finance Authority worries that the gap could widen to $225 million for the next fiscal year. A staff-written NIFA report, issued two weeks ago after the overseer rejected the county’s latest three-year budget plan, said Nassau “is moving in the wrong direction.”

The county was expected to submit an update to NIFA on Friday. Mangano must submit the county’s budget for fiscal 2012 by Sept. 15.

NIFA in January imposed a control period over the county’s finances. In June, it hired consulting firm Grant Thornton LLP.

The 30-year taxable general obligation bonds would provide $375 million for the arena, built next to the existing Nassau Coliseum, and $25 million for a ballpark, which would house Long Island’s second professional minor-league baseball team. Officials project a new arena opening in 2015 if voters approve the measure.

The facility would seat 17,500 fans for hockey and 20,000 for concerts, with 50 luxury boxes planned, though no architectural rendering is available. The baseball field for an Atlantic League team would have a 6,000-seat capacity. Frank Boulton, principal owner of the Central Islip-based Long Island Ducks in Suffolk County, is behind the move to bring the island its second baseball franchise.

“The redevelopment of the coliseum and addition of a ballpark are steps in the right direction,” Comptroller George Maragos said in a statement.

He also cited the need for taxpayer protections such as payment guarantees by Wang and the Islanders, and the clarifying of revenue-sharing percentage on non-Islanders events. In addition, Maragos said the county should retain the development rights on the 77 acres around the Coliseum, known in Nassau as “the Hub.”

Mangano on Thursday issued a statement saying the county had retained all development rights in the original lease agreement with Wang’s holding company, Arenco.

Wang, who bought the Islanders with fellow Computer Associates International Inc. — now CA Technologies — co-founder Sanjay Kumar in 2000, has repeatedly rejected notions of building the arena with his own money.

Wang bought out Kumar’s share of the team in 2006. Kumar is now serving a 12-year prison sentence for obstruction of justice and securities fraud related to a bookkeeping scandal.

The arena plan essentially is an outgrowth of Wang’s so-called Lighthouse development project of a few years back, also revolving around a new coliseum. That plan fizzled amid political disagreements and Wang’s reluctance to scale down the proposal.

The Maragos report, quoting from a study done for the comptroller’s office by Minneapolis consulting firm Conventions, Leisure & Sports International, said Wang’s revenue projections were overly optimistic. CLSI found “significant concerns” with Wang’s estimates, including third-party events that are “triple the number that can be reasonably estimated,” sponsorship and naming-rights revenues 125% higher than normal, and premium club-seating pricing and sales projections double what would be reasonable, based on the industry average.

Nassau County’s independent Office of Legislative Budget Review estimates that the debt service cost on the $400 million bond would require about $29.3 million annually. Hamer said that receipts, estimated around $15 million annually, would still leave Nassau County with a significant shortfall.

“The county’s now acknowledged that shortfall,” Hamer said.

The Islanders and their coliseum each opened for business in 1972. The team won four straight Stanley Cup championships from 1980 through 1983, but they have missed the playoffs the past four years and have not won a playoff round since 1993. Hence, “revenue projections for playoff games should be excluded” from estimates, Maragos’ report said.

The Islanders’ poor showing, the age of the building, and their existence in the shadow of two other area NHL teams — the New York Rangers and the New Jersey Devils — have diminished fan turnout. The team was last in attendance in the 30-team NHL for the 2010-11 season, averaging 11,059 fans per game, and have finished in the bottom three in attendance in each of the past six seasons.

Wang and county officials maintain that outdated technology has cost the coliseum concert bookings. “I’ve been hearing this talk about a new arena going back eight to 10 years, even prior to this administration,” Sullivan said. “There’s agreement on all sides, the building’s old.”

Camoin Associates of Malta, N.Y., was commissioned by the Nassau County Industrial Development Agency to provide an economic-impact analysis of the coliseum proposal. It concluded that the loss of the Islanders would mean 2,660 fewer jobs, $243.4 million annually in lost sales, annual earnings of $104 million lost by county residents, and the loss of $7.8 million in sales, hotel and entertainment tax revenue.